The Corn Is Dying All Over America

All over America the corn is dying. If drought conditions persist in the middle part of the country, wheat and soybeans will be next.Weeks of intense heat combined with extraordinarily dry conditions have brought many U.S. corn farmers to the brink of total disaster. If there is not significant rainfall soon, many farmers will be financially ruined. This period of time is particularly important for corn because this is when pollination is supposed to happen. But the unprecedented heat and the extremely dry conditions are playing havoc with that process. With each passing day things get even worse. We have seen the price of a bushel of corn soar 41 percent since June 14th. That is an astounding rise. You may not eat much corn directly, but it is important to realize that corn or corn syrup is just about in everything these days. Just look at your food labels. In the United States today, approximately 75 percent of all processed foods contain corn. So a huge rise in the price of corn is going to be felt all over the supermarket. Corn is also widely used to feed livestock, and if this crisis continues we are going to see a significant rise in meat and dairy prices as well. Food prices in America have already been rising at a steady pace, and so this is definitely not welcome news. The weather conditions in the middle part of the country during the last couple of months have been highly unusual. The following is from a recent article in the Los Angeles Times....

It's not that the Midwest hasn't been extremely hot before, and it's not that it hasn't been incredibly dry. But it's unusual for a vast swath of the Midwest to be so very hot and so very dry for so very long -- particularly this early in the summer. The current heat wave -- which is spurring comparisons to the catastrophic heat of 1936 -- is "out of whack," meteorologist Jim Keeney said Friday in an interview with the Los Angeles Times.

Corn crops typically pollinate and mature in June and early July. That is why this time of the year is so vitally important for corn. We have reached a make it or break it moment.The following is how an Accuweather.com report described what is happening right now....

Either heat or drought can stress the stalks, but both can basically shut down the pollination process. When this happens few, small or no ears of corn form.According to AccuWeather.com Agricultural Meteorologists, you can't raise a corn crop with less than an inch of rain over six weeks, combined with 100-degree and higher temperatures. However, these conditions have taken place in much of the southern corn belt through the week of July 4, 2012.

If pollination does not happen, corn farmers might as well give up.Just check out what agricultural economist Chris Hurt said the other day....

"Pollination problems just can’t be overcome, even if the weather turns. There’s no turning back. There’s just failure."

At this point, half of all corn in the state of Indiana is already in poor shape.With each passing day, the condition of the corn gets even worse.As a recent article in the Chicago Tribune detailed, many farmers feel completely helpless at the moment....

Dave Kestel, who farms about 1,300 acres in Manhattan about 40 miles southwest of Chicago, said he feels helpless."Every day you get out there and it's the same heat and cloudless sky," he said. "You see your corn just withering out there, knowing you can't do anything about it."

The United States is suffering from a severe lack of rain. Just look at the chart posted below. According to the U.S. Drought Monitor, most of the country is experiencing drought conditions right now....These drought conditions have also played a major role in the huge number of wildfires that we have seen lately.There are a few northern states that are not feeling the drought right now, but otherwise the rest of the country is extremely dry.So what does all of this mean for you and I?A recent article by Holly Deyo summarized why we should all be praying for rain....

Since 75% of grocery store products use corn as a key ingredient, expect food prices to skyrocket. Corn is also a staple in many fast foods. Corn is in ethanol and the main food source or chickens. In addition to this, maize is in many things that aren't obvious like adhesives, aluminum, aspirin, clothing starch, cosmetics, cough syrup, dry cell batteries, envelopes, fiberglass insulation, gelatin capsules, ink, insecticides, paint, penicillin, powders, rugs and carpets, stamps, talcum, toothpaste, wallpaper, and vitamins. That's just for starters...This is a huge heads up for you to purchase corn-using products NOW before these conditions reflect in grocery goods. It will be a narrow window of opportunity.

These thoughts are being echoed by many agricultural economists as well. According to Businessweek, the outlook for U.S. food prices is bleak....

"When people look at rising prices for hamburger, butter, eggs and other protein sources from higher corn costs, that’s when more money ends up in the food basket," said Minneapolis- based Michael Swanson, a senior agricultural economist at Wells Fargo & Co., the biggest U.S. farm lender. "We were hoping for a break, and we aren’t going to get it."

Unfortunately, the fact that the corn is dying all over America is not just a problem for the United States.As Businessweek also recently noted, the fate of U.S. corn affects the entire globe....

When rain doesn’t fall in Iowa, it’s not just Des Moines that starts fretting. Food buyers from Addis Ababa to Beijing all are touched by the fate of the corn crop in the U.S., the world’s breadbasket in an era when crop shortages mean riots.This year they have reason to be concerned. Stockpiles of corn in the U.S. tumbled 48 percent between March and June, the biggest drop since 1996, the U.S. Department of Agriculture said last week. And that was before drought hit the Midwest.

The United States is the world’s biggest exporter of corn by far, and if there is a massive corn crop failure in America it is going to be felt to the four corners of the earth.Just check out what Abdolreza Abbassian, a senior economist with the U.N. Food & Agriculture Organization, said the other day....

"Everyone watches the U.S. because they can rely on it. Without it, the world would starve."

Crop insurance agents and agricultural economists are watching closely, a few comparing the situation with the devastating drought of 1988, when corn yields shriveled significantly, while some farmers have begun alluding, unhappily, to the Dust Bowl of the 1930s. Far more is at stake in the coming pivotal days: with the brief, delicate phase of pollination imminent in many states, miles and miles of corn will rise or fall on whether rain soon appears and temperatures moderate.

As I wrote about last week, if the weather does not turn around soon the implications are going to be staggering.Even if we got some significant rainfall at this point a tremendous amount of damage has already been done according to the Washington Post....

Jay Armstrong, owner and operator of Armstong Farms in Kansas, flew his small plane over a portion of the affected area and landed with the impression that the potential damage is far worse than is commonly understood.“At this time of year, when you look down in a place like Indiana or Illinois, you should see just lush green fields,” Armstrong said. “I saw bare soil. I just thought to myself, the market has no idea what’s coming.”

So is there significant rain in the forecast?

Unfortunately, the answer is no.

The National Weather Service says that the corn belt will experience "above-normal temperatures" and "below-normal rainfall" over the next week.At this point it does not look like there will be any significant rainfall for the foreseeable future....

"We got a break in the temperatures over the weekend but no rain of significance is in sight for next seven days," said Jim Keeney, a meteorologist for the National Weather Service the US central region based in Kansas City, Missouri.

Needless to say, that is really bad news.

Right now we just have more heat and more dryness to look forward to. The skies are like iron and the earth is like brass. We like to think that we have conquered nature, but at moments such as these we see that is not true at all.A couple of weeks ago I wrote an article about all of the reasons why we should be concerned about the second half of 2012. In that article I did not even mention drought and crop failures. Sometimes major problems have a way of piling on top of themselves.The U.S. economy is already in bad enough shape without adding major crop failures to the mix. This is something that we just don't need right now.But it looks like we are going to have to deal with it. Unless there is a major change in the weather, food prices are going to go up even more and large numbers of farmers and ranchers are going to be absolutely devastated.